Google Earnings Smash Sales Records
YouTube helps power search giant to profits that far exceeded analyst expectations.
YouTube helps power search giant to profits that far exceeded analyst expectations.
Google’s parent company shattered sales records for the first quarter, fueled by a surge in digital ad spending that has strengthened the tech heavyweight even as regulators try to curtail its power.
The robust earnings reflect advertiser anticipation that the reopening of the economy will coincide with a gusher of business activity, as well as Google’s prominent place at the center of digital commerce.
The pandemic provided a jolt to Alphabet Inc.’s advertising business as more people shifted their lives online during a stay-at-home year, turning to Google search to find takeout meals and grocery-delivery options while clicking through videos on the company’s YouTube platform. Brands responded by shifting ad spending from print, television and in-store promotions to find customers across the Google universe.
Alphabet reported first-quarter sales of $55.31 billion, an increase of 34% from a year earlier when advertising sales plunged as the coronavirus crippled the global economy. Profit more than doubled, with per-share earnings far exceeding analysts’ expectations.
The company posted $31.88 billion in sales from its signature products, including search, Gmail and maps, a 30% increase that reflected the way brands are spending to reach people online. YouTube pulled in $6 billion, increasing 49% from a year earlier.
Total profit reached almost $18 billion, soaring 162% from the previous year.
Google said it would repurchase an additional $50 billion in shares, fulfilling the wishes of investors who had been monitoring the company’s swelling cash reserves.
Alphabet shares gained more than 4% in after-hours trading.
“Google has the wind at its back now,” said Sean Stannard-Stockton, chief investment officer at Ensemble Capital, a Burlingame, Calif., firm with $1.5 billion in assets under management that counts Alphabet among its largest holdings. “It didn’t just glide through Covid. It’s really well positioned and is even stronger,” he said.
As the world’s digital ad leader, Google has been positioned to benefit from a broad wave of online ad growth sweeping across the economy. Smaller rival Snap Inc. last week reported a 66% increase in revenue on strong user growth and increased advertising, while Verizon Communications Inc. posted a 26% increase in ad sales.
The digital-spending surge has helped Google continue to deliver sales growth even as its share of the American search-advertising market slips. The company’s market share of search last year fell to 57% from 61% a year earlier, while rival Amazon.com Inc. increased its share to 19% from 13% over the same period, according to eMarketer, a research firm.
Regulators remain the largest obstacle to Google’s business success. Last year, the Justice Department and a separate coalition of states brought antitrust lawsuits alleging the company has struck secretive agreements to favor its search-engine and advertising businesses and thwart competitors.
The cases could force Google to spin off pieces of its business or cede its perch in search to rivals.
In addition, antitrust lawsuits have been filed by Epic Games Inc. over Google’s Play app store and the publisher Daily Mail over its digital advertising auctions.
Google has said it operates in a competitive market and people use its search service because they choose to, not because they are forced to. It says its Play store operates under policies that are fair to developers and its ad-tech business competes in a crowded marketplace with several alternatives for publishers.
The company continues to spend heavily to ensure Google remains the default search engine on iPhones and other devices. The toll fees, known as traffic-acquisition costs, rose 30% to $9.71 billion during the first quarter from a year earlier.
Google also has been spending to diversify beyond its core ad business with a cloud-computing service that challenges Amazon and Microsoft Corp. The company has been trumpeting a bevy of billion-dollar deals in recent months that lifted sales at the division 46% to $4.05 billion in the quarter.
The company has wooed new clients by packaging its offerings with benefits across its dominant advertising and search businesses. On Monday, it announced an eight-year, $1 billion-plus contract with Spanish-language broadcaster Univision Communications Inc. that it won in part by including YouTube and search elements.
The practice, known as bundling, has drawn criticism from lawmakers who say it undermines competition, but Thomas Kurian, Google’s Cloud chief executive, has said the company is simply responding to consumer needs.
On Monday, Apple Inc. released a software update that will give users the option to prevent apps from tracking their use on iPhones and other devices. The change is expected to pressure Google to implement similar privacy measures on its Android operating system, the world’s largest. Such a maneuver would upend Facebook Inc.’s business, which uses the data collected across mobile devices to target ads to users.
Because of its digital-advertising dominance, Google will have to walk a fine line in introducing privacy restrictions of its own on its mobile operating system. It has drawn criticism from privacy advocates and ad-tech competitors alike over a plan to stop selling ads on individuals’ browsing across multiple websites. Privacy advocates say its plan to group individuals in advertising cohorts doesn’t go far enough, while rivals consider it anticompetitive.
The speed bumps from privacy aren’t expected to slow Alphabet’s moneymaking machine. The company’s search engine has a lock on 92% of world-wide traffic, its Maps offerings have an 89% share of navigation and YouTube accounts for 73% of the online video world.
Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: April 27, 2021.
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We’re thinking about productivity at work all wrong, Cal Newport says. But how do we tell the boss that?
You’re oh so busy. You’re on Slack and email and back-to-back Zoom calls , sometimes all at once . Are you actually getting real work done?
Cal Newport doesn’t think so.
“It’s like, wait a second, none of this mattered,” says the Georgetown University computer science professor and crusader for focus in a distracted age.
Newport, 41, says we can accomplish more by shedding the overload. He calls his solution “slow productivity”—and has a book by the same name —a way for high achievers to say yes to fewer things, do them better and even slack off in strategic doses. Top-notch quality is the goal, and frenetic activity the enemy.
This, he told me, is the thing that can save our jobs from AI and layoffs, and even make shareholders happy.
I had questions. Can we really be less is more at work, or have we grown addicted to constantly crossing endless tasks off our to-do lists? What will our bosses think?
After all, so many of us yearn for a burnout cure-all that will preserve our high-achiever status, and this isn’t the first you-can-have-it-all proposition we’ve heard. Champions of the four-day workweek promise we can ditch an entire workday just by working smarter. Remote-work die-hards swear it’s a win for employers and employees. Few dreams are more seductive than bidding goodbye to hustle culture, while still reaping the benefits of said hustle.
Newport acknowledges that saying no to preserve our productivity can be a delicate act. He knows that entrepreneurs have more flexibility, but says those of us who answer to managers can carve this out too. We might even find we have more power and value to our employers.
“You should take that value out for a little bit of a spin,” he suggests. He offers some pointers.
The way we work now is a “serious economic drag,” Newport says. Knowledge workers have devolved into a form of productivity that’s more about the vibes—stressed!—than actually making money for the company. Data from Microsoft finds that lots of us spend the equivalent of two workdays a week on meetings and email alone.
One mistake we make, Newport says, is taking on too many projects, then getting bogged down in the administrative overload—talking about the work, coordinating with others—that each requires. Work becomes a string of planning meetings, waiting on someone from another department to give us a go-ahead.
Newport recommends giving priority to a couple projects, then bumping the others to a waiting list in order of importance. Make that list public, say, in a Google doc you share with bosses and colleagues.
“When workloads are obfuscated behind black boxes, it’s just people throwing stuff at each other, it’s very dangerous to say no,” Newport says.
If someone comes to you with more work, have them consider where it should go on your list, Newport says.
When you do say yes, double the estimated timelines you set to complete a project. That’s how long it’ll take to do it well, he says. And try what he calls a “one for you, one for me strategy.” Every time you book an hour-long meeting, block an hour for independent work on your calendar.
It’s a foreign and bracing approach for those of us who reflexively say yes to work requests. Newport’s philosophy requires transparency and confidence. Instead of “let me see how fast I can turn that around!”, try, “This request will take six hours. I’ll have that time in three weeks.”
This could be heresy at some companies. The trick is in the delivery, he says. Never make it seem like work tasks are a burden you shouldn’t have to face. Instead, stress that you’re trying to be as effective as you can for the team and the company. Be positive, and deliver on the timelines you promise. You’ll be seen as someone who’s organised and on top of your game.
We think bosses want someone who’s always accessible—fast to respond, fast to jump into action, Newport says. But what bosses really want is to know that a project they hand you will get done.
Quiet quitting permanently is a bad idea, Newport says, but a little bit is good.
Don’t feel guilty, he adds. You’re working under a new, better system. We weren’t meant to work all out , every day, without seasonal shifts and pauses.
Pick a time—say, the month of July—to slow down. Don’t volunteer for extra work. Don’t offer Mondays as a possibility for meetings. Take on an easier project for cover.
He also recommends taking yourself out to a monthly movie during the workday. Say it’s a personal appointment, and enjoy the sense of control and creativity it brings.
You don’t have to nail a manifesto to the wall, he adds, or try to change the whole company culture. Instead, quietly carve out change for yourself.
The catch: You have to be really good at the part of your job that matters. And you have to get big stuff done. Remember, this is about being a happier high performer, not slacking.
“There’s no hiding,” Newport says.
I suspect this terrifies a lot of people. They’ve gotten good at being always on and typing up yet another meeting agenda. Tackling a major project or goal is often harder, and comes without a guarantee that you’re going to nail it.
Scary or not, real work is becoming imperative. AI is coming for the rote parts of our jobs. Leaders are sussing out the “nonsense” projects and roles in their ranks as they cut jobs, Newport says. No boss wants to be left with a team of people who are aces at responding to emails.
Mastering a valuable skill puts you in control. Newport writes of people who leave corporate America behind and move where they want , working remotely as contractors, charging wild fees for fewer hours of work. The more you shed the work that doesn’t matter, and spend that time getting better at the stuff that does, the more leeway you’ll get.
“The marketplace doesn’t care about your personal interest in slowing down,” Newport writes. “If you want more control over your schedule, you need something to offer in return.”
Figure that puzzle out, and you might just be able to have it all—high achievement, and your sanity.
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
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